Pension Funds Look to Strip JPMorgan CEO Dimon of Chairman Title

Overseers of government worker pension funds pressed JPMorgan Chase to strip Chief Executive Jamie Dimon of his additional title of chairman after the London Whale fiasco.

Overseers of government worker pension
funds pressed JPMorgan Chase & Co to strip Chief
Executive Jamie Dimon of his additional title of chairman after
the London Whale fiasco, renewing a proxy battle the bank won
only narrowly last year.

Pension funds, including that of the American Federation of
State, County and Municipal Employees (AFSCME), said on
Wednesday they filed a shareholder resolution that says the bank
would be better run if the chairman and CEO jobs were held by
different people.

Backers cited in a statement what they called "mounting
investor concerns with the board's oversight" following more
than $6 billion of losses last year from bad derivatives trades
linked to a London-based trader - known as the London Whale for
the outsized bets.

The group also cited other problems such as the
cease-and-desist orders the bank received from regulators last
month that require it to improve its internal controls, which
Dimon oversees.

"It is impossible to imagine how board oversight of the
company's affairs will be strengthened while CEO Jamie Dimon
leads the very board that is charged with overseeing his own
shortcomings," said Denise L. Nappier, the Connecticut Treasurer
who oversees the Connecticut Retirement Plans and Trust Funds,
which are part of the group.

Other filers of the proposal include those overseeing the
pension assets of New York City teachers, police and
firefighters, according to their joint statement.

The issue of splitting the chairman and CEO jobs has become
a staple argument of shareholder activists and reformers.

Proponents say having the roles filled by a single person
concentrates too much corporate power and can lead to conflicts
of interest. Many companies defend the practice, however, saying
it can be more efficient and that other measures can assure the
board's independence and oversight.

AFSCME last year filed a similar resolution that won 40
percent support from JPMorgan shareholders. Later filings showed
backers of the resolution included mutual funds sponsored by
American Funds, which before had voted with management on a
similar resolution.

JPMorgan spokesman Mark Kornblau declined to comment.

Last year the bank argued the split was not necessary
because other directors were independent. AFSCME filed, then
withdrew, a similar proposal last year at Goldman Sachs Group
after the bank agreed to appoint an independent lead
director.

AFSCME last week said it has filed similar proposals this
year calling for independent chairs to be named at companies
including General Electric, Lazard and Wal-Mart
.

Another backer of the resolution at JPMorgan this year is
Hermes Equity Ownership Services, an adviser owned by BT Pension
Scheme, which operates pension funds for British Telecom
employees.

It wasn't all bad luck for the capital markets this week: Hedge funds had a decent first quarter despite a slowdown in jobs numbers, BlackRock might be heading into new territory as hedge fund managers take a hard look at their counterparties, and the head of the IMF didn't pull any punches when assessing today's global economy. At least we can admire the nice weather and some of the best quotes of the week.